Trump budget plan aims to restructure consumer watchdog

The White House on Monday proposed a major restructuring of the Consumer Financial Protection Bureau that that calls for cutting the watchdog agency's budget and limiting its enforcement power.

Under the proposal, which was included in President Donald Trump's fiscal 2019 budget plan, the Consumer Financial Protection Bureau would be funded through Congress rather than the Federal Reserve, giving lawmakers more influence over the agency's priorities.

The agency's fiscal 2019 budget would also be capped at its 2015 level of $485 million, compared with a projected $630 million for this fiscal year. The plan, which would take two years to fully implement, also calls for putting restrictions on the the agency's enforcement authority.

"The proposed reforms would impose financial discipline, reduce wasteful spending, and ensure appropriate congressional oversight," according to a strategic statement released Monday.

The proposal is the latest illustration of the Trump administration's intent to revamp an agency it sees as acting too aggressively and wielding too much power. The agency is an "unaccountable bureaucracy with unchecked regulatory authority," the White House said in its proposal.

Trump appointed one of the agency's most vocal critics, White House budget chief Mick Mulvaney, to be the bureau's acting director in late November. Mulvaney has already taken several steps to shake up the agency, such as ending lawsuits and pausing investigations. The agency's office in charge of overseeing lending-practices cases has also been stripped of its enforcement powers.

Mulvaney has said that going forward, the Consumer Financial Protection Bureau would be humble and would not push the envelope as it had previously. "We enforce the law; we do not make the law," Mulvaney said Sunday in an interview on Face the Nation.

But Mulvaney's efforts have alarmed Democrats and consumer groups that say he is defanging an agency meant to protect consumers.

"Supposed acting director Mulvaney of CFPB on Face the Nation yesterday talking about doing the job with 'humility' and not being aggressive. Financial cheaters, scammers, and fraudsters are not humble," Richard Cordray, who led the agency under President Barack Obama, said on Twitter on Monday. "To take them on, you must be aggressive to be effective, as he admits I was."

The budget proposal, said Karl Frisch, executive director of the advocacy group Allied Progress, reflects Trump's "unequivocal contempt for consumers and his unwavering loyalty to the big banks, predatory lenders, and Wall Street special interests."

Mulvaney is "clearly working from the outside and the inside to destroy the CFPB and cripple its ability to protect consumers from financial predators," Frisch said.

Kirsten Sutton Mork, the agency's chief of staff, said in a message to the bureau staff on Friday that "If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau's statutory responsibilities, but go no further."

Sutton Mork spent years as a senior staff member of the House Financial Services Committee. The committee's Republican chairman, Rep. Jeb Hensarling of Texas, has been one of the agency's fiercest critics.